DALIAN, China Sept 25 (Reuters) - China's steel consumption
dropped this year for the first time since at least 2000 due to
slower economic growth, leading to a surplus of iron ore in the
country and a more than 40 percent plunge in prices of the
steelmaking raw material.

But top global miners like Vale and Rio Tinto
, which have invested billions of dollars to ramp up
output to sell more iron ore to China, are still convinced that
Chinese demand has yet to peak with an urbanisation drive there
expected to last at least another decade.

Apparent crude steel consumption in China, the world's top
consumer and producer of the alloy, fell 1.9 percent on year to
61.9 million tonnes in August, Wang Xiaoqi, vice chairman of the
China Iron and Steel Association, told an industry conference.

"There are many reasons for this - the economy slowing and
the economy undergoing restructuring. Steel consuming sectors
have cut their demand," Wang said on Thursday.

With China now focusing growth on consumption and away from
investment that has fuelled years of massive expansion in
China's steel sector, Wang said: "From now, domestic steel
output and consumption won't rise along with economic growth."
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